I lost my $1,700,000 home in the LA wildfire — what happens to my mortgage?
Vawn Himmelsbach
Mon, January 27, 2025 at 3:01 AM PST 5 min read107
Thousands of people have lost their homes in the Palisades and Eaton wildfires that ripped through Greater Los Angeles in early January, driven by the powerful Santa Ana winds. And sadly, more fires have emerged since then.
A whopping 200,000 residents were forced to evacuate. And though some have since been allowed to return “home,” not everyone has a home to return to.
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If you were to return home after the evacuation order was lifted in your community to discover your $1.7 million home had completely burned to the ground, you may wonder what it means for your mortgage and property tax.
While the grief of losing your home is immense, not knowing how to move forward financially may only make it worse.
Here’s what you can expect in this situation.
What happens to your mortgage?
According to Climate.gov, thousands of homes can be damaged or destroyed every year from weather and climate-related disasters, including wildfires, floods, tornadoes and hurricanes, causing widespread destruction and tens of billions of dollars in damages across the United States.
If your house is destroyed in a disaster — such as the Palisades or Eaton wildfires — you still have to pay your mortgage and a portion of your property tax.
However, the Consumer Financial Protection Bureau says mortgage lenders may offer mortgage forbearance programs, which allow you to temporarily pause or reduce your mortgage payment for a period of time.
In the case of the LA wildfires, California Governor Gavin Newsom says five major banks, the Bank of America, Citi, JPMorgan Chase, U.S. Bank and Wells Fargo, are providing mortgage relief to victims in designated areas.
“The lenders have committed to offering up to a 90-day grace period on mortgage payments, 90-day waiver of late fees, and 60- to 90-day moratorium on new foreclosures for property owners whose structures were damaged or destroyed by the LA firestorms,” Newsom’s press release said.
But, ultimately, mortgage balances are still owed — even if the house is gone.